FT opinion article: “Let the Fed put money where it is really needed”. She means CBDC. The problem is that the Fed now needs to take money away, not add to it. This is not going to end well. Thread #Fed #monetary policy #markets #bonds #equities ft.com/content/0c8636…
1/The author argues that the Fed has overreached its mission. It has fuelled a shadow banking system and an asset bubble and will now have to create a recession in order to control inflation.
2/And politicians have been happy to outsource the decisions because they can then claim they are not to blame. The Fed is being asked to do stuff it is not qualified to do (same as the Supreme Court).
3/One idea would be for individuals to hold Fed accounts. The central bank could then funnel money to the places where it is needed.
4/IMHO I agree with everything until point 3. She is talking about a CBDC arrangement. This is 20/20 vision. It might be a good idea for the next crisis (although the central banks are really bad at identifying where money is needed).
5/But what we are talking about now is taking money away, not adding to it (if we want to control inflation). So, are we going to allow the central bank to take money away from your account? Please sign up for this.
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